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In spite of positive Purchasing Managers’ Indices (PMI) from across the Eurozone yesterday, the Euro is weaker this morning. The GBP-EUR rate is up in the €1.18 area and EUR-USD is down around $1.05. A growing feeling that Marine Le Pen might make significant gains in the French Presidential elections and her threats to remove France from the Eurozone are considered to be very real. Le Pen would probably not be where she is in the polls if her opponents weren’t entangled in a mire of controversy. Parallels with the US Presidential Election are hard to avoid. Euro traders will be watching for this morning’s release of Eurozone Inflation data. It’s a second estimate of the January numbers and should be around 1.8% on the year.

Sterling had a good day yesterday as the Euro declined. Sterling’s advance was also driven by the House of Lords decision not to oppose the Article 50 bill, even after 20 hours of the same arguments being voiced in a variety of ways. The release today of the second assessment of Q4 GDP also seems to have brightened the mood amongst traders. The first estimate gave us a 2.2% annual growth rate but there is a feeling the second estimate, which involves a lot more resolved data, might show and uptick on that. The UK economy is flouting the doom merchants at the moment and Sterling is probably undervalued even at these levels.

US interest revolves around the Federal Reserve’s meeting minutes, which will be released at 19:00 GMT. All anyone really wants to know is when the Fed will make its next interest rate hike. Hundreds of words in the minutes will be ignored as traders search for that snippet…assuming the message is there…and is clear. The message is often shrouded in central-bank-speak. Good luck with that, everyone.

This afternoon brings Canadian Retail Sales data and the forecasts suggest a healthy level of growth. If you are a buyer of Canadian Dollars, you may wish to do so before that data is released, to mitigate the risk of CAD strength.

And the widely unpopular president Trump may wish to tell us about his pizza preferences if he wants to curry favour with the US public. Gudni Thorlacius Johannesson is the president of Iceland and he has a 97 percent approval rating amongst the Icelandic populace. His latest announcement is that he believes pineapple on pizza should be banned. He mentioned it during a trip to a school. That isn’t the reason for his popularity, but if Trump has a dig at anchovies on pizzas…..well, it couldn’t do any harm.

At the Surgery

A mother storms into a doctor’s surgery and asks, “Can a nine-year-old perform an effective appendectomy?”
The doctor is taken aback and says, “Of course not. It’s a very complicated and precise operation. It takes seven years of medical trai….”
She doesn’t allow him to finish but turns to her son and says, “What did I tell you? Now go and put it back.”